FILE PHOTO: The Salesforce logo is pictured on a building in San Francisco, California, U.S. October 12, 2016. REUTERS/Lily Jamali/File Photo

San Francisco-based Salesforce has been reaping the benefits of a trend of companies increasingly turning to cloud-based services, but faces stiff competition from Microsoft’s Dynamics 365, which competes with Salesforce’s flagship Sales Cloud offering, and from Oracle.

Asked about the company’s forecast for the third quarter, Chief Financial Officer Mark Hawkins highlighted the company’s $21 billion in remaining performance obligation, which represents future revenue under contract that has not yet been recognized. That figure was up 36 percent year-to-year.

“Wall Street can focus on Wall Street,” Hawkins told Reuters on a call Wednesday afternoon. “What we focus on is strong economics.”

The company forecast third-quarter profit between 49 cents and 50 cents per share, and revenue of $3.36 billion to $3.37 billion.

Analysts on average were expecting a profit of 54 cents and revenue of $3.35 billion, according to Thomson Reuters I/B/E/S.

The company’s shares fell more than 3 percent in trading after the bell.

“Investors want to see two things: more growth and how they are going to handle increased competition,” said Adam Sarhan, CEO of 50 Park Investments, an investment advisory service.

Salesforce has been boosting its research and development expenditures, as well as marketing and sales, increasing its operating expenses 27 percent to $2.32 billion in the second quarter.

Revenue from its flagship product, Sales Cloud, rose 12.7 percent to $1 billion, a record for a quarter.

The company’s unearned revenue, a key metric used to measure future business for subscription-based software vendors, rose 24 percent to $5.88 billion. Analysts on average expected $5.91 billion, according to financial and data analytics firm FactSet.

Salesforce posted revenue of $3.28 billion for the second quarter, up 27 percent from $2.58 billion a year ago. That beat analysts’ estimates of $3.23 billion.

Salesforce accounted for about 20 percent of the 2017 global customer relationship management software market, up from 18.1 percent in 2016, according to research firm IDC.

Oracle is the company’s closest rival with 7.1 percent while Germany’s SAP is next with 6.5 percent.

Microsoft’s Dynamics enterprise software is also emerging as a major competitor after nearly tripling its market share to 4 percent in 2017.

“We’re in an enviable position right now as the market leader,” said Keith Block, the company’s long-time chief operating officer who was named co-CEO earlier this month.

Net income rose to $299 million, or 39 cents per share, in the second quarter ended July 31, from $46 million, or 6 cents per share, a year earlier.

Analysts on average were expecting a profit of 47 cents per share.

Excluding items, the company earned 71 cents per share.

Reporting by Arjun Panchadar in Bengaluru and Salvador Rodriguez in San Francisco; editing by Sriraj Kalluvila and Phil Berlowitz